O’Brien, Wong pitch for recovery funds

Thursday

Oct 1, 2009 at 6:00 AM

By John J. Monahan TELEGRAM & GAZETTE STAFF

Worcester City Manager Michael V. O’Brien and Fitchburg Mayor Lisa A. Wong joined leaders of 11 other communities yesterday in urging legislators to approve new redevelopment incentives. They said the incentives are needed to make them more competitive with metropolitan Boston and lower-cost suburban areas in attracting new business and redevelopment projects.

Their pitch came as lawmakers consider a bill of state Rep. Antonio F.D. Cabral, D-New Bedford, described as an economic recovery act for older cities that serve as regional economic hubs.

Mr. Cabral said the combination of expanded historic rehabilitation tax credits, incentives to address higher-cost brownfield redevelopment, and business tax breaks for projects that lease redeveloped commercial space and provide new jobs will spur a new era of redevelopment in cities such as Worcester, Fitchburg, Brockton and Holyoke.

State Rep. Stephen L. DiNatale, D-Fitchburg, said the incentives would be especially helpful in efforts to redevelop a handful of older mill sites ideally suited for new use in the Fitchburg area, adding that Gov. Deval L. Patrick’s administration is supporting the approach.

“We have millions of square feet of what is considered old space that is obviously more expensive to redevelop than greenfields, as they are called,” Ms. Wong said.

“These brownfield sites need cleanup monies and incentives, because even if developers can figure out how to make these projects work, they are always going to find other projects elsewhere that will have a higher profit margin,” Ms. Wong said.

With skilled work forces and developed infrastructure in older cities, she said, the state would be advancing smart growth in existing developed areas while helping create jobs and improve the quality of life for the one in six residents of the state who live in these older cities outside the Boston area.

Mr. O’Brien told members of the Joint Revenue Committee at a hearing that another feature of the legislation would allow so-called gateway cities to provide new incentives not just for affordable housing, but mixed income housing needed to stabilize and revitalize urban neighborhoods with an economically diverse population.

He said leaders of 13 cities have been working on the proposals as they have recognized they are at an economic disadvantage in competing with suburbs for job-creating businesses, while shouldering a higher level of social services.

“We need these new tools to give us that competitive edge to allow these creative opportunities to happen,” Mr. O’Brien said.

He said there are currently three historic rehabilitation projects being considered in the city that would likely be undertaken if the incentives are in place. Currently there is a waiting list for state historic renovation tax credits and the bill would lift the current cap on those funds for the gateway cities.

“It will allow us to work with developers to take historic buildings and bring them back to life, while also making sure that the lease rates for the rentals will compete with the market,” he said.

Without the tax credits and other incentives, he said, developers are unable to “bridge the gap between what the market will bear and the up-front costs to fix up the buildings.”

Ms. Wong said she is seeing major important development opportunities pass by because of the built-in higher costs of redeveloping older properties. Meanwhile, she said new condominium projects are being built outside of city centers near highways, drawing residents from older neighborhoods in Fitchburg, which has a destabilizing effect.